EU leaders will meet Thursday for a crunch summit to discuss further coordination on COVID-19, climate change, security and external relations.
The meeting in Brussels will be the first physical one since October after a fresh round of lockdowns and pandemic measures were imposed last month.
But with Brexit negotiations and the EU budget still deadlocked, the summit looks set to be overshadowed by both these issues.
There is hope in Brussels circles, however, that UK Prime Minister Boris Johnson’s Wednesday night dinner with Commission President Ursula von der Leyen in Brussels might allow negotiators to finally agree.
But the process is finely balanced according to Jannike Wachowiak, a policy analyst at the European Policy Centre.
She said: "We have certainly reached a crossroads now, as in, technical negotiations have gone as far as they can at this point and we know that more than 95 per cent of the legal text is supposedly drafted.
"But we are still facing the same sticking points we were faced for months and months, which are fisheries, the so-called level playing field which is about fair competition rules and the governance of the whole deal.
"And we need to solve these remaining sticking points with political intervention.”
There is more hope too after an EU diplomat reported that an agreement has been reached between Warsaw, Budapest and Berlin and that leaders will accept a compromise on Thursday to help unlock the €750bn pandemic recovery fund and €1.1tn budget, which Hungary and Poland are vetoing over a rule of law mechanism that was inserted by MEPs that links receiving EU funds to respecting the bloc's fundamental values.
Many European lawmakers are awaiting a deal now though, including Dutch MEP, Kati Piri, who told Euronews that she believes Hungary and Poland have caved in to the pressure. She said: "72 per cent of Hungarian citizens support the demand when you give EU funds there have to be conditions on the rule of law".
Piri added: "This is not something we are doing for the Dutch, the Germans or the French citizens in the European Union. We are doing this to make sure when funding is available, it reaches those Hungarians and those Polish people in need of these funds."